1. SRE stock plunged 23.52%, marking its worst drop since Feb 5, 1992. 2. Q4 EPS hit $1.50, missing the $1.60 consensus, impacting investor confidence. 3. Revenue fell to $3.8B, well below the $4.9B expected by analysts. 4. Full-year earnings guidance was downgraded due to regulatory issues and higher costs.
The steep 22% drop following weaker-than-expected earnings and lowered guidance signals strong negative investor sentiment. Similar earnings misses in the past, such as in the energy sector downturns, have led to sharp, volatile market reactions.
Given the drastic drop and severe miss in both earnings and revenue, the report critically impacts SRE. The downgrade in guidance due to regulatory and cost pressures increases uncertainty among stakeholders, making this news highly significant.
The immediate market reaction is pronounced, though long-term outlook revisions may also affect future performance. Historical examples in the utility sector show that earnings surprises typically trigger short-term sell-offs.